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TL;DR
Intel reported third-quarter revenue of $16.5 billion, up 21% year over year, while its Data Center and AI revenue rose 78%. Its shares then fell about 29% on October 30 after the company forecast fourth-quarter revenue below analysts’ expectations, with higher memory costs weighing on PC demand and production limits constraining growth.
Intel shares fell about 29% on Friday, October 30, after the chipmaker forecast fourth-quarter revenue below analysts’ expectations, even though its latest results showed 21% revenue growth and a sharp increase in sales to data centers. The contrast highlights how the AI boom is raising demand for Intel’s server processors while also tightening memory supplies and making PCs more expensive, adding pressure to the company’s largest business.
Intel reported third-quarter revenue of $16.5 billion for the quarter ending before its October 29 results release, up from $13.7 billion a year earlier and above its own guidance. Adjusted earnings were $0.52 per share, compared with Intel’s forecast of $0.38. Adjusted gross margin was 44.1%, about two percentage points above the company’s guidance.
The forward outlook was weaker. Intel projected fourth-quarter revenue of $15 billion to $16 billion, below the $17.1 billion analysts expected, according to LSEG data cited by CNBC. It forecast adjusted earnings of $0.25 per share, versus analysts’ $0.43 estimate, and adjusted gross margin of 38%. Intel’s shares closed at $65.76 Friday, down from $92.07 on Thursday. Yahoo Finance calculated that the fall erased nearly $140 billion in market value.
Intel’s Data Center and AI revenue rose 78% to $7.3 billion from $4.1 billion a year earlier, with $3 billion in operating profit. PC chip revenue, however, declined 5%. Intel expects PC revenue to drop more than 20% from the third quarter to the fourth, citing higher system prices and supply constraints. The company also said a deadly accident at its factory in Israel would reduce fourth-quarter revenue by about $300 million.
Infographic 01 · One day, one stake
One trading day cost Washington more than it paid
Intel's stock fell about 29% on Friday after a weak forecast. Here is what that did to the shares the US government bought in August 2025, and how the price compares with what other buyers paid.
The government’s stake, on paper
433.3 million shares × price
- PaidAug 2025, at $20.47 a share$8.9B
- Thursday's close29 Oct 2026, $92.07$39.9B
- Friday's close30 Oct 2026, $65.76$28.5B
The one-day loss (about $11.4B) was larger than the $8.9B the government paid. The stake is still worth roughly three times its cost.
What different buyers paid per share
Red line: Friday’s close, $65.76
- US governmentAug 2025 · 433.3M shares$20.47
- SoftBankSep 2025 · 87M shares$23.00
- Nvidiaagreed Sep 2025 · 215M shares$23.28
- Public offeringAug 2026 · about 242M shares$95.00
2025 buyers are far above water; buyers of the August 2026 offering are about 31% below their price (my arithmetic).
Market prices as reported by Yahoo Finance and CNBC for 29–30 October 2026; no licensed price feed. Stake values: Yahoo Finance’s arithmetic with 433.3 million shares. Purchase prices from Intel’s 10-Q and the August 2025 agreement.
Sources: Yahoo Finance, 30 Oct · Yahoo Finance (stake), 30 Oct · CNBC, 30 Oct · Intel 10-Q, 30 Oct · Intel 8-K, 22 Aug 2025.
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AI Demand Meets Intel’s Supply Limits
The results show that AI demand is not an unambiguous benefit for Intel. Data-center customers are buying more server processors, but Intel says it cannot increase production quickly enough to meet demand. At the same time, AI infrastructure requires large quantities of memory. The resulting pressure on memory supply and prices is making PCs more expensive, which could reduce sales in Intel’s much larger client-computing business.
That combination matters beyond Intel. Companies planning server upgrades may face limits on processor availability, while PC buyers could encounter higher prices or delay purchases. Intel’s forecast also gives investors a reason to distinguish strong current demand from the company’s ability to convert it into near-term revenue and margins. Intel’s finance chief said positive free cash flow next year is unlikely, according to the source report, underscoring the financial challenge of increasing capacity while margins are forecast to fall.
The drop also affected the U.S. government’s investment in Intel. The government holds 433.3 million shares, purchased at $20.47 each for about $8.9 billion using chip grants previously promised to the company. Based on the reported closing prices, the stake’s value fell from roughly $39.9 billion on Thursday to $28.5 billion on Friday. That is a large one-day paper loss, but the holding remained worth substantially more than the government’s purchase price.
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A Rally Met a Lower Forecast
Intel released its third-quarter results after markets closed on Thursday, October 29. The next day’s decline was its worst daily fall since the 1970s, based on Yahoo Finance’s comparison of closing prices dating to May 1973; the source says only the decline on July 5, 1974, was larger. That description refers to the historical price comparison, not to a claim that Intel’s business has reached a particular low.
The shares had already had an unusually strong year. Yahoo Finance calculated that they had nearly quadrupled from the start of 2026 to a record on June 22. Even after Friday’s fall, the stock was still up nearly 80% for the year, while down by more than half from that June peak. Intel’s sharp reversal followed a broader difficult session for technology stocks: CNBC reported the Nasdaq Composite fell 2.9%, while Nvidia, Broadcom and Qualcomm also declined.
The immediate issue was the gap between the reported quarter and the next-quarter outlook. Intel’s results showed growing AI-related sales and better-than-guided margins, but investors were responding to expectations for lower revenue and margins ahead. Analysts also questioned whether the improvement in the quarter could continue. CNBC reported that D.A. Davidson cut its rating to neutral in a note titled “Not fixed yet”; Yahoo Finance reported Bernstein analyst Stacy Rasgon described the outlook as “(in a word) terrible.”
““Not fixed yet.””
— D.A. Davidson, as reported by CNBC
How Long Will the Squeeze Last?
Intel has not established in the information available how quickly it can expand server-chip output or how much of the current demand it can meet. It is also unclear how long elevated memory prices will persist, how much they will affect PC purchases, or whether PC demand will recover after the expected fourth-quarter decline. The company’s forecast reflects the conditions it expects for the quarter; it does not settle the longer-term outlook for AI-related sales.
The source material also does not identify the full financial or operational effects of the factory accident in Israel beyond the estimated $300 million in lost fourth-quarter revenue. Nor does the government’s share valuation represent a realized gain or loss: the reported figures are based on market closing prices, and the shares remain held. Further detail on Intel’s customer demand, production plans and cash flow will be needed to judge whether the growth can be sustained.
Production and Margins Set the Test
Intel’s next results and earnings call will show whether fourth-quarter revenue and gross margin track its forecast of $15 billion to $16 billion and 38%, respectively. Investors and customers will also be watching for evidence that Intel can increase server-processor supply, and for updates on memory costs and their effect on PC prices and orders.
Another measure is whether outside customers commit to using Intel’s manufacturing facilities. The source identifies customer sign-ups for its factories as one of the factors to watch, but does not report new commitments. Intel has also warned that positive free cash flow next year is unlikely, making its spending needs and ability to fund expansion part of the outlook. The timing and scale of any improvement remain uncertain.
Key Questions
Why did Intel shares fall after a strong quarter?
Investors focused on Intel’s fourth-quarter forecast, not only its latest results. The company projected revenue of $15 billion to $16 billion, below analysts’ $17.1 billion expectation, and forecast lower adjusted earnings and gross margin.
Intel said its Data Center and AI revenue rose 78% year over year to $7.3 billion in the third quarter. The segment reported $3 billion in operating profit, but Intel also said it could not build server chips fast enough to meet demand.
How is AI demand affecting Intel’s PC business?
The source report says AI data centers are increasing demand for memory, pushing up prices and contributing to higher PC system costs. Intel’s PC chip revenue fell 5% in the third quarter, and the company expects it to decline by more than 20% quarter over quarter in the fourth.
Did the U.S. government lose money on its Intel stake?
The stake’s market value fell by about $12 billion in one day, based on the reported closing prices. But the government paid about $8.9 billion for its 433.3 million shares, and the holding was still valued at roughly $28.5 billion after Friday’s decline. These are paper valuations, not a sale.
Source: ThorstenMeyerAI.com
